Want to know why Woolworths is so successful. Look no further than the relationship with Walmart board member Jack Shewmaker which is on display in Sydney this week, as Bill Eclairs explains.
They may never appear together again after this week. The Bib and Bub of Australian retailing. Roger Corbett, still one of the most underestimated men in Australian business and his US mentor, Jack Shewmaker, a board member of Walmart, head of the company’s Strategic Committee and a former President of the world’s biggest retailer.
Roger and Jack are at a CEDA lunch in Sydney on April 20 ( Wednesday), a rare public appearance together and one that should be attended by everyone interested in retailing.
The topic isn’t known, its likely to be full of PR speak, but don’t forget Woolies’ current campaign is aimed at grabbing part of the pharmacy business, an idea that came from the US where retailers have a big hold on the ‘drug store’ business. Only speciliast chains maintain national competition to Walmart which has been taking market share in recent years. Woolies’ idea for the pharmacy business came from Walmart.
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Jack Shewmaker is not only an insider in probably the biggest success story in business in any country around the world, Walmart, but he’s left his imprint on Woolies, Australia’s most successful retailer in the past decade.
Go into any of Woolies Big W stores around Australia and its like a mini Walmart Supercentre, The colour scheme, the look, the ‘stack em high’ approach to merchandising is a direct result of the interaction between Roger and Jack.
While the ‘Fresh Food People’ idea of Woolies is a reworking of ideas from the US retailers and Tesco and the Morrison chains in Britain, the ‘Everyday Low prices ” idea of Woolies is a re-working of the Walmart slogan, ‘Always Low Prices. Always”.
Roger was head of Big W a decade or so ago and Jack was five years retired as President of Walmart, which was considerably smaller in those days than the $A300 billion plus a year in sales this behmoth is now generating. (For a good feature on the triumphs and pitfalls of being Walmart go to http://www.economist.com/business/displayStory.cfm?story_id=2593089 .)
Jack was a board member of Walmart and the poor souls at Coles Myer in Melbourne for years had only a limited and at times scornful understanding of the Walmart input into Woolies’ growth strategies, and Roger Corbett’s development as a top flight retailer.
In fact Coles Myer had little understanding of the Walmart philospohy and its impact on Woolies and Big W, taking as they did their lead of KMart Corp of the US, the long time partner in the Kmart stores here, while the Target chain was a poor attempt to replicate the Target chain of the Federated Stores group of the US, which after some hiccups, is now managing to compete with Walmart in America.
Jack Shewmaker is now a retailing consultant. He retired in 1988 and has been a member of Wal-Mart’s Board of Directors since 1977.
Shewmaker was Walmart’s President and Chief Operating Officer and Vice Chairman and Chief Financial Officer, so he’s a heavy hitter, probably the only big name international retailer who pays a regular visit to Australia each year.
The consultancy to Woolies has lasted more than 15 years, a relationship that goes back to the years of Woolies’ CEO, Paul Simons, himself a retailing legend in this country.
Big W is currently run by a young executive, Marty Hamnett, aged about 40, who’s been brought on by Roger Corbett. Hamnett moved to Big W at the end of 2001 after senior jobs in Supermarkets in Queensland and WA , the sort of track record that a future CEO of the retailer should have, just like Roger Corbett.
Shewmaker’s is chairman of Walmart’s stratergic planning and finance committee, the most important board committee in the company and the one that has had to find the money, the executives and the acquisitions to drive the company’s enormous growth in the past 16 years.
His leadership of this key committee has made a mockery of those occasional market rumours that find their way into newspapers about how ‘Woolies under threat from Walmart’.
Fact is nothing happens in M&A for Walmart without Jack knowing and although some of the moves haven’t been brilliant , such as Germany, Mexico, Canada and especially Britain have paid off as the Economist article notes.
Jack is in Australia for his annual consult with the Woolies board and senior management and we know pharmacies is the key strategy issue at the moment. Just as important, however, has been his input on the ‘Project refresh’ revamp of Woolies logistics chain, from suppliers to the store.
Astute readers of the display employment ads in the national papers at the weekend would have seen Coca Cola Amatil looking for an experienced executive to handle relations with Woolies and another unnamed supplier looking for a similar sort of person to handle its relations with Woolies.
Just another sign of the times in the Australian food and retailing industries and at the bottom of all of this is the influence of firstly Walmart, and then Tesco on Woolies and Coles. And none have been more influential than Jack Shewmaker.